Far Reaching Economic Recession

In mid-2008, we might be facing an
economic recession in global proportions. There are important
factors that caused this economic slowdown. These include the high
oil prices which will lead to high prices of food. Since food
production is dependent on the production process and transportation
process on oil. This will be combined with the credit crisis and an
increase in unemployment.

As early as January of 2008, the International Monetary Fund (IMF)
already predicted that global economic growth will decline. It would
be greatly affected by the United Stated Economy.

The IMF mentioned that the economic recession in the United States
will be affected greatly by the financial market conditions and the
continuing correction in the U.S. housing market. IMF predicted that
the United States will have a mild recession in 2008 but will
recover, although modest, in 2009.

Meanwhile, global growth would achieve little recovery in 2009,
there is a 25 percent chance that the global economy would record 3
percent or less of growth in 2008 and 2009. This is already like
saying that the world will encounter a recession.

United Nations has also predicted the same thing to happen.
According to UN, the world economy growth was remarkable in 2007.
There are more than 100 economies tat reported to have an increase
of 3 percent. Meanwhile, developing countries are also showing
promises. The economic growth average in developing countries was
almost 70 percent.

But UN Conference on Trade and Development stated that there is
clear disaster or danger for the world economy to standstill in
2008. The UN report stated that this economic standstill will hit
many poor nations and would definitely end the boom in economic
growth.

The United States economic decline on 2008 will greatly affect the
global economy. Being one of the largest economy in the world. Some
reckless practices has brought the looming recession in the United
States; no down payment, no verification of income/ assets/ jobs,
interest rate mortgages, negative amortization, and teaser rates.
Approximately 50 to 60 percent of the loans made in the banks were
done through these reckless practices.

Economic recessions are not only distinct in the United States.
European countries are also getting affected by economic slowdown.
Denmark was confirmed to be in a recession. The economic growth in
Denmark declined by 0.6 percent in the first quarter of the year.
While Estonia and Latvia both entered recession in the second
quarter of the year. While Sweden showed zero growth in the second
water of 2008.

The British economy is also being hit by rising oils prices and
credit crisis. Telltale signs that the British economy is entering
recession, when the housing market fell in 2007. In the next
quarter, the housing market went down twice its former figure.
Currently the economic growth in United Kingdom is zero. This would
be next to the negative economic growth that happened in second
quarter of 1992. The current slowdown has ended 16 years of
continuous economic growth, the longest period of economic expansion
in Britain since the 19th century.

Economic crisis is also happening in New Zealand whose economys
growth declined by 0.3 percent. Meanwhile in Australia, consumer
confidence fell into a 16 year low economic growth in July. South
Africa is being warned that it will enter a recession by this year.
Japan has experienced a drop in economic growth, the first time in
five years. Meanwhile, Canadas economic growth has shrank in the
first quarter of the year.